The Department of Natural Resources didn’t follow internal and state policies on numerous levels, DNR Commissioner Mark Holsten admitted after a legislative audit concluded the agency misspent more than $300,000 of taxpayer money and broke state laws by co-hosting a 2007 conservation officers conference.

With two DNR managers still on leave and under investigation, those answers won’t come for several more weeks while another investigation is completed.

The report issued Thursday by Legislative Auditor Jim Nobles outlines how DNR managers in the Law Enforcement Division worked diligently beginning in 2004 to bring the North American Wildlife Enforcement Officers Association conference to St. Paul, an event ostensibly labeled as “training and education.”

The state agency paid the travel, lodging and salaries for the DNR’s 204 enforcement employees to attend the July 2007 conference, which also drew officers from across the United States and Canada.

Nobles blamed the misspent money and broken laws on the DNR, saying Holsten’s office “implicitly” approved private fundraising and public expenditures for the conference.

The report criticized the DNR for paying $187,000 in employee salaries for non-training activities to organize and attend the conference. Some DNR employees were paid to attend a fishing trip to Lake Mille Lacs, to attend a golf outing and to provide security for children attending the conference with their families.

Meanwhile, two private groups that worked with the DNR to host the conference — the Minnesota Conservation Officers Association, an employee union, and the enforcement officers association — left the event with $76,600 in profit.

Conservation officers also received permission to solicit private donations for the event, a violation of state law. Holsten’s office gave permission for the fundraising, the audit states.

Donations, which were raffled at the conference, included a $1,800 resort gift certificate, a houseboat trip valued at $2,510 and a boat valued at $17,000.

Nobles said such state employee fundraising violates state law but that the law wasn’t followed because of the “department’s mixed messages, information communication and conflicting interpretations of department policy.”

He said the DNR managers never created a budget, guidelines or oversight for the conference and never entered into a formal agreement with the officers’ union or the enforcement officers association to co-host the event.

However, auditors said there was no evidence DNR employees made money personally from the event.

Nobles presented the audit Thursday to the Legislative Audit Commission, a bipartisan group of state lawmakers. Many of the commission members peppered Nobles with questions during the 90-minute meeting.

“This is troubling to me,” said Rep. Dennis McNamara, R-Hastings, of one DNR memo that raised doubts about the legality of private fundraising but was dismissed by DNR managers.

Holsten said he agreed with all the audit’s findings but that employees didn’t follow an oral directive against using public resources to support a private event. Other agency internal policies also were not followed, he said.

“If they had been, it would have tripped more discovery,” Holsten said. “We have checks and balances.”

The two employees who risk losing their jobs are Mike Hamm, the chief of the DNR’s Enforcement Division, and his wife, Cathy Hamm, who oversees DNR enforcement in the metro region. The Hamms live in Mahtomedi and are career DNR employees. Both played key roles in organizing the conference and have been on paid “investigatory” leave since mid-May.

Holsten declined to say whether the Hamms or any other employees would be disciplined. He is awaiting the results of a separate internal investigation by the Department of Employee Relations before taking disciplinary action.

But Cathy Hamm said she should not be blamed for the conference failures when supervisors above her, including in the commissioner’s office, signed off on expense and time sheets. The audit supports that claim, she said.

“I definitely believe I should be reinstated,” Cathy Hamm said.

Mike Hamm declined to comment for this story.

Though Holsten took responsibility for the DNR’s failings, he said he wasn’t informed of conference expenditures. Documents show Deputy Commissioner Laurie Martinson signed a series of conference expense sheets through April 23, 2007, when she approved $160,000 for lodging, meals and conference registration.

Of those expenses, “I had no detailed knowledge of them,” Holsten said.

Holsten said the DNR would work with the attorney general’s office to get back the $76,600 in profit earned by the union and the officers association.

Nobles said his report also would be forwarded to the attorney general’s office and the Ramsey County attorney for review of possible criminal charges.

Nobles and lawmakers also were concerned that three DNR conservation officers involved in the conference refused to be interviewed under oath by auditors. The officers cited their Fifth Amendment right not to incriminate themselves. Nobles said that had never happened in previous audits, though Holsten said the three officers did offer answers to internal investigators after being offered immunity from prosecution.

The DNR initially spent Game and Fish funds for the conference — money that is generated by hunting, fishing and other license fees — but later reimbursed the fund for the full amount, Holsten said.

A joint House-Senate Environment and Natural Resources Finance Division meeting will be held Sept. 8 to discuss the audit and examine the DNR’s role in the conference.

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